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Wednesday, April 29, 2009

The Most Feared in Investment Business

“How if I take the risk in investing?" This question may often said if you are to weigh to make the investment. Say you have the money US$ 10K, and you are confused whether to put it in a bank or elsewhere. If in the bank, you may feel secure. But sometimes, offer investments in other places are often very large and seduce that this sometimes frightening you.

That there are certain investments risks. Well, from my experience so far, usually only have three the risk that feared by most people when they invest:

1. Decrease in value of Investment

Risk that most people fear when investing in general is, "Will I lose money?" Most people may say "no" when asked like that. Who want to lose money? However, the problem, that there are certain risks in any investment. Only difference is in size. There are investment products that the risk is big enough, there is currently, and there are small. One thing that most people fear, once again is: "How if I lose money?"

Okay, now if you invest, how much decrease in the value you are willing to responsibility when you lose? 10 %? 30 %? 50 %? Or 100 %? Regardless of loss you are willing to responsibility, remember, it is part of investing. Do not ever expect you will continue to speculate. The loss, it must be experienced occasionally.

2. The difficulty of Sale Investment Products

The second most feared by people to invest when investment is whether the product is easy for re-sale. Some people may be happy to invest in gold because gold is considered easy re-sale. However, there are also people who invest in the currency to U.S. dollars, and dollars are quick inclusion to the bank. This is because when the dollar was kept in the cupboard, the physical condition of paper money may be decreased, and that sometimes will make a time when the dollar would be sold again. Know, some banks often do not want to buy foreign currency when the condition of your money is torn, damaged or dingy.

Other example of investment product that is not always easy to re-sale is a collection of goods. Collection of good in general is not always easy because the re-sale markets the goods the buyer is very specific. For example is painting. Because of a specific market, not easy to sell the painting. But, once sold, the price could be very high and gives the rather fortunately for those who sell them.

So, before you decide to invest, consider first how easy it is the product of your investment can be sold again.

3. Investment Results Provided Not Increase Price of Goods and Services

Imagine if you invested in the deposit interest rate to give 10 percent a year, while in the year the price of goods and services increased 15 percent even? This often happens, not too high because the price increase of goods and services, but because of the selected product itself will not necessarily appropriate.

Some of you may want investment product that is safe and conservative. However, the consequence is that the investment results obtained may not match the price increase of goods and services. If you hold it naturally from year to year, then you will go bankrupt.

What should you do to address this risk? Do not close them to information. Learn investment products that you may not know, and then try to go there considering all the consequences. The long run, you can certainly overcome the high price increase of goods and services to invest in products that are potentially to be able to give results higher than the price increase of goods.

Happy investing!
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